The LHC is a financial penalty on those who delay taking out private health insurance in the form of a two per cent loading on their premium for each year after their 31st birthday they delay purchasing cover. Currently, people with an LHC loading receive the private health insurance rebate on the total cost of their premium (i.e. the premium plus any LHC loading). Schedule 1 seeks to change this so that people with an LHC loading only receive the rebate to the cost of their premium, not including the LHC loading.(More information about the LHC loading and the effect of this bill is available in its bills digest. )

Background of the bill

As well as removing the private health insurance rebate from the Lifetime Health Cover loading component of affected private health insurance premiums, the bill was also introduced to end the Incentive Payments Scheme which allows people to claim the rebate as a direct payment.

Currently there are three ways that people can claim the private health insurance rebate: (1) through the Premiums Reduction Scheme, which is an upfront discount on the premium offered by the health insurer; (2) as a tax offset claimed through the Australian Taxation Office; (3) through the Incentive Payment Scheme, which is a direct payment from a Medicare office. This bill would remove the latter option.(Read more about the Incentive Payments Scheme and the bill generally in its bills digest.)

The majority voted in favour of a motion to read the bill for a second time.(Read more about the stages that a bill must pass through to become law here. ) This means that the majority agree with the main idea of bill and that the House can now consider it in more detail.

The first change is to remove the rebate from the Lifetime Health Cover ('LHC') loading component of affected private health insurance premiums. The LHC is a financial penalty on those who delay taking out private health insurance in the form of a two per cent loading on their premium for each year after their 31st birthday they delay purchasing cover. Currently, people with an LHC loading receive the private health insurance rebate on the total cost of their premium (i.e. the premium plus any LHC loading). Schedule 1 seeks to change this so that people with an LHC loading only receive the rebate to the cost of their premium, not including the LHC loading.(More information about the LHC loading and the effect of this bill is available in its bills digest. )

The second change is to end the Incentive Payments Scheme which allows people to claim the rebate as a direct payment. Currently there are three ways that people can claim the private health insurance rebate: (1) through the Premiums Reduction Scheme, which is an upfront discount on the premium offered by the health insurer; (2) as a tax offset claimed through the Australian Taxation Office; (3) through the Incentive Payment Scheme, which is a direct payment from a Medicare office. This bill would remove the latter option.(Read more about the Incentive Payments Scheme and the bill generally in its bills digest.)

The majority voted in favour of a motion to read the bill for a third time.(Read more about the stages that a bill must pass through to become law here. ) This means that the majority agree with the bill and that it has now passed in the House of Representatives. The bill will now be sent to the Senate for their consideration.

Following this vote, it was agreed without further division to read the two related bills a third time as well.(Read more about why a division does not always take place in our FAQ Section. )

create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)

The majority voted in favour of a motion to agree with the bill as amended.(Read more about the stages that a bill must pass through to become law here. ) This means that the majority agree with the bill and that the House can now decide on whether to read the bill for a third time.

Following the vote on this bill, it was agreed without further division to agree to the two related bills as well.(Read more about why a division does not always take place in our FAQ Section. )

create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)

The majority voted against a motion introduced by Liberal MP Tony Abbott, which means that it was unsuccessful.

The motion was to amend the original motion "That this bill be now read a second time" with the following: "That all words after 'That' be omitted with a view to substituting the following words: 'this bill, and the related bills, not be proceeded with until after the Parliament has met in the 44th Parliament.'" In other words, Mr Abbott wanted to delay consideration of these bills until after the next election.

create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)

The majority voted in favour of a motion to read the bill for a second time.(Read more about the stages that a bill must pass through to become law here. ) This means that the majority agree with the main idea of the bill. Following this vote, it was agreed without further division to read the two related bills a second time as well.(Read more about why a division does not always take place in our FAQ Section. )

create three private health insurance tiers with different levels of private health insurance rebate to reduce the amount of rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2012 in its bills digest.

)

increase the rate of Medicare levy surcharge for taxpayers who do not have complying health insurance and whose income (including reportable fringe benefits) for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge—Fringe Benefits) Bill 2012 in its bills digest.)

The majority voted in favour of a motion to read the bill for a third time.(Read more about the stages that a bill needs to pass through before becoming law here. ) This means that the majority agree with the bill and that it is now passed in the House of Representatives. It will now be sent to the Senate for their consideration.

reduce the amount of private health insurance rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the proposed reduction of the rebate in the bills digest (419 KB) for the Fairer Private Health Insurance Incentives Bill 2009.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the proposed increase in the rate of Medicare levy surcharge the bills digest (339 KB) for Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the bills digest (346 KB) for the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009.)

The majority voted in favour of a motion to read the bill for a second time.(Read more about the stages that a bill needs to pass through before becoming law here. ) This means that the majority agree with the main idea of the bill and that the House can now consider it in detail.

reduce the amount of private health insurance rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the proposed reduction of the rebate in the bills digest (419 KB) for the Fairer Private Health Insurance Incentives Bill 2009.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the proposed increase in the rate of Medicare levy surcharge the bills digest (339 KB) for Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the bills digest (346 KB) for the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009.)

The majority voted in favour of a motion "That the words proposed to be omitted (Mr Dutton’s amendment) stand part of the question." This means that the words that Liberal MP Peter Dutton wanted to omit will remain unchanged.

Mr Dutton's amendment related to the original amendment "That this bill be now read a second time"(Read more about the stages that a bill needs to pass through before becoming law here. ) and was:

reduce the amount of private health insurance rebate eligible taxpayers with complying private health insurance are entitled to when their income for surcharge purposes is above the relevant Medicare levy surcharge threshold;(Read more about the proposed reduction of the rebate in the bills digest (419 KB) for the Fairer Private Health Insurance Incentives Bill 2009.

)

increase the rate of Medicare levy surcharge for certain taxpayers who do not have complying health insurance and whose income for surcharge purposes is above the relevant Medicare levy surcharge threshold.(Read more about the proposed increase in the rate of Medicare levy surcharge the bills digest (339 KB) for Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 and the bills digest (346 KB) for the Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009.)

No

Yes

Passed by a small majority

How
"voted very strongly against"
is worked out

The MP's votes count towards a weighted average where the most important votes get
50 points,
less important votes get
10 points,
and less important votes for which the MP was absent get
2 points.
In important votes the MP gets awarded the full
50 points
for voting the same as the policy,
0 points
for voting against the policy, and
25 points
for not voting. In less important votes, the MP gets
10 points
for voting with the policy,
0 points
for voting against, and
1
(out of 2)
if absent.

Then, the number gets converted to a simple english language phrase based on the range of values it's within.

No of votes

Points

Out of

Most important votes (50 points)

MP voted with policy

0

0

0

MP voted against policy

5

0

250

MP absent

0

0

0

Less important votes (10 points)

MP voted with policy

0

0

0

MP voted against policy

4

0

40

Less important absentees (2 points)

MP absent*

0

0

0

Total:

0

290

*Pressure of other work means MPs or
Senators are not always available to vote – it does not always
indicate they have abstained. Therefore, being absent on a less
important vote makes a disproportionatly small
difference.